Correct use of credit card: Credit card important settings which every user must know.
Summary
Nowadays credit cards have become an important financial tool. But most of the people just know how to swipe the card, they don’t understand its credit card important settings and its features. In this blog today we will learn about the important settings of credit cards and will tell you those 7 settings which every credit card user must know so that your money remains safe and you get the full benefit of rewards. By keeping your credit card safe you will also be saved from tension and risk of any thirst.
Introduction
Using a credit card has become very easy today, but if it is used smartly, you can avoid many financial problems. By properly understanding tools like credit limit, rewards, alerts, auto-pay, and security features, you can secure your credit card and yourself. And using it smartly also saves you from unnecessary charges and stress. And there are many other things which give you great benefits in your future.
Let us understand step-by-step today some important settings that can make your credit card experience safe, rewarding and hassle-free. And can also give you many benefits in future.
Benefits of using Credit Card
1. Cashless & Instant Payment
Shopping, bill payment or online expenses are done easily and fast and secure transactions also take place.
2. Credit History is built
If you make payment on time, then your credit score improves which gives you a lot of benefits in the future, loan gets approved easily and many banks offer it.
3. Reward Points & Cashback
You get points on every spend which are useful in shopping/travel. You can use coin and points for cash or offers or any travel items.
4. Useful in emergency
If there is no money in an emergency, then the money from the credit card can be used.
5. Fraud Protection
In case of a wrong transaction, the bank gives you a refund, so you do not have to worry and in case of fraud, the bank guides you well and helps you completely.
What are the disadvantages of wrong use of a credit card?
1. High Interest Charges
If payment is not made on time, then interest is charged which is much higher than the normal interest.
2. Overspend
Sometimes if you spend 80-95% of the limit, it creates an impression in front of the bank. The bank thinks that if the user has demand on credit card, then it gives less offers and charges high interest.
3. Annual & Late Fees
If you miss a payment by mistake, then extra money is charged which is quite high, which can even double your bill.
4. Credit Score goes down
If you delay payment repeatedly, your score can go down due to which the bank does not give you any kind of offer and the bank loses its trust in you.
5. Confusing Terms & Conditions
Understand that signing without understanding can be costly. There can be high interest and charges and many other things, so read the entire contact carefully.
Credit card Important Settings that you must know
1. Credit Limit Management
It is important to know what is the maximum spending limit of your card. This will make it easier for you to manage it.
Increasing Credit Limit: If your score is good, you can request the bank to increase the limit, due to which the bank can also increase your limit.
Set Usage Alert: If you get an alert after using the 30% credit card limit, you will be saved from overspending, your bills will come in handy and you will be able to clear your bills easily and your credit score will also increase.
2. Payment Settings
Choose Billing Date: Always set the due date near your salary date.
Set Auto-pay: So that payment is done on time and there are no late fees or charges or interest.
3. Rewards & Cashback Settings
Select Category: Grocery, fuel, shopping etc. Select rewards on those categories where you spend more.
Check Rewards Expiry: It is important to use the points on time so that they do not expire, otherwise the points expire after the points expire, so keep claiming rewards on time.
4. Security Settings
Turn on Transaction Alerts: You will receive notification of every transaction via SMS or Email which will help you to know where your card is being used if it is being sold fraudulently.
Use Virtual Card: It is safer for online shopping.
Lock/Unlock Feature: If your credit card is lost somewhere, you can instantly block it from the app.
5. Foreign Transaction Settings
Choose No Foreign Fee Card: If you are going out, take a card which does not have any charges. Choosing such a card will save you a lot of money.
Choose Currency Conversion Smartly: Always pay in foreign currency, not local currency.
6. Account Management via Mobile App
Every bank has an app where you can:
Check your balance
Check your transactions
Make payments
Check your rewards
You can check all your things properly through the bank’s app.
7. Customer Support Settings
Save your support number: It will be useful in emergencies. It will help you quickly in case of fraud or any wrong transaction.
Keep track of the dispute process: If you are charged wrongly, understand how to complain.
Because sometimes wrong charges are levied by mistake, then it is very important to understand how to complain.
Advantages of Credit Cards
1. Alternate in Payments
Credit cards mean that you can make purchases even though you have zero balance in your bank account. This is easier if you are talking about a big purchase.
2. Limits on Access to Credit
Credit cards set you a credit limit, which users can use up, which limited usage is a great tool in terms of not overspending. Managed Usage Within the cap can improve your financial discipline.
3. Travel Benefits
Most credit cards have certain perks revolving around travel, including free travel insurance, airport lounge access, and lower rates at hotels. Some such benefits make your travel more comfortable.
4. Record Keeping
Credit card statements keep detailed records of purchases that clients have made, which helps them keep an eye on the money they have spent and can also help them budget more efficiently.
5. Promotional Offers
Credit card companies run promotional offers all the time, where you can get 1000 off or free for 1000 Rupee spent on merchants or categories. These offers save a lot of money for users.
Disadvantages of Credit Cards
1. High-Interest Credit Cards
High interest rates – The best part of a credit card can quickly turn into its worst feature when it always applies the high interest rate to the entire balance, even if you pay it off in full that month. This can spiral into a huge debt if you are not careful.
2. Spending Too Much
The convenience of using credit cards can also lead mostly to instantaneous purchases– you foot the bill if you like it! Users could resort to buying things that they can’t pay for, putting them in debt.
3. Fees and Service Charges
Credit cards have annual fees, late payment charges, foreign transaction fees, etc. All these charges can add up, and you need to consider them while picking a credit card.
4. Impact on Credit Score
If credit cards are mismanaged (late payments or high utilization), this can come back to bite, affecting one’s credit scores. That could have a direct effectt on their ability to borrow in the future.
5. Complicated Terms and Conditions:
Credit card agreements are so often complex, and users simply miss the key points, which end up resulting in unwanted charges or penalties.
My Opinion:
Credit Card is your servant, not your master
I believe that we do not control the credit card, we should control the credit card properly and everyone should know the important features of the credit card and the credit card should be used properly and expenses should be kept under control and payments should be made on time. If you understand its features, settings and risks, then this card makes you financially strong. But if you use it blindly, it can take you into the jungle of debt which is very difficult to get out of. That is why use credit card with correct information.
Conclusion
Correct use of credit card can become a smart financial tool for you which in a way makes you financially strong. You just need to know how to use its settings and features correctly. Keep an eye on credit limit, make payment on time, keep security alert on, and take full advantage of cashback and make payment on time and avoid late fees and high interest. And definitely get all the information about credit card because credit card can make you financially strong and can also ruin you, hence definitely get all the information about credit card.
